Pepsi Makes a Comeback in the Soda Wars, Reaching Third Place in US Sales
In a dramatic shift within the competitive beverage industry, Pepsi has clawed its way back up the soda rankings after years of decline, as rival Coca-Cola suffers a surprising stumble. According to the latest annual sales report from Beverage Digest, the 127-year-old cola brand has returned to the No. 3 spot among America's top soda brands by sales volume in 2025. This marks a significant turnaround after Pepsi slipped to fourth place last year, having first been knocked out of second place by Dr Pepper in 2023 before being overtaken by Sprite in 2024.
Pepsi's Resurgence and Coca-Cola's Decline
Pepsi's comeback suggests the brand—once the scrappy challenger that nearly toppled Coke in the 1980s 'Cola Wars'—still has fight left. Coca-Cola, first sold in an Atlanta pharmacy in 1886, remains the undisputed king of the $100 billion US soda industry with more than double the market share of any of its rivals at 18.5 percent. However, it has lost some of its fizz after sales fell by a steep 5.3 percent last year. Dr Pepper, a Texas-born soda first introduced in the 1880s, boosted sales and held firm in second place, cementing its status as a serious challenger to the two cola giants.
Pepsi's sales were flat, meaning it gained on Coca-Cola but lost ground slightly on Dr Pepper. A huge drop in demand for Sprite helped Pepsi back up the rankings. Sprite—created by Coca-Cola in 1961—slid two spots down the rankings. Meanwhile, Diet Coke—launched in 1982 as America's first major sugar-free cola—climbed into fourth place after posting one of the strongest performances among top brands.
Market Share and Industry Dynamics
According to Beverage Digest, Dr Pepper accounted for 8.8 percent of all carbonated soda sales in 2025, beating Pepsi's 8.1 percent, Diet Coke's 8 percent, and Sprite's 7.9 percent. Mountain Dew had 5.7 percent. The soda wars play out not just via cans and bottles in stores and bars but via drinks fountains in restaurants and hotels. Recently, Coca-Cola snatched the contract to supply Marriott from Pepsi—across its roughly 9,700 hotels in 143 countries, including 6,200 in the US. Coke also secured a big contract from Pepsi at Costco in 2025. However, Pepsi scored a win in 2024 when it won back the drinks contract at Subway across more than 20,000 US locations.
The shake-up highlights how quickly fortunes are shifting in the soda aisle. Just two decades ago, Pepsi was firmly entrenched as America's No. 2 soda, while Dr Pepper lagged far behind and Sprite had a fraction of its sales. Coca-Cola's slump was partly blamed on a backlash among Hispanic consumers following a viral hoax where TikTokers claimed the company fired thousands of Latino workers at a Texas bottling plant and reported them to ICE.
Broader Trends in the Beverage Market
Americans are drinking less soda overall. Across the entire beverage market, total volumes fell by 0.9 percent last year as prices rose. The long-term trend is even more stark: Americans now consume far fewer soft drinks than they did two decades ago, with per-person intake dropping sharply since the mid-2000s. While traditional sodas are struggling, a new category is booming. Energy drinks were the only type to see volume growth last year—up 9 percent. Monster was a big winner, but older brands like Gatorade fell.
The jump in rank for Pepsi comes a year after it slid to fourth place when Dr Pepper overtook it for second in 2024, and Sprite moved into third in 2025. Pepsi pointed out that the Pepsi brand remained the overall No. 2 soda when taking into account other versions, which also include Diet. This resurgence underscores the dynamic and ever-changing landscape of the US soda industry, where brand loyalty and market strategies continue to evolve rapidly.
